The Employment Service links the historic unemployment surge to AI, but experts blame downsizings on high interest rates, a weak dollar, and past over-hiring by companies.

According to the CBS Labor Force Survey Data for May 2026, a total of 4,469,000 Israelis were considered in the workforce (61.6%), of whom 126,500 (2.8%) were unemployed.

While software firms cut jobs under pressure from AI and the strong shekel, a new Aaron Institute report says Israel’s high-tech workforce rose 6.2% in the first quarter to…